Buffett Embraces AI: Berkshire Gains $1.4 Billion from Alphabet Investment

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Buffett Embraces AI: Berkshire Gains $1.4 Billion from Alphabet Investment

Bitget-RWA2025/11/26 03:56

By:Bitget-RWA

- Berkshire Hathaway earned $1.4B profit from its Alphabet stake as shares surged 19.2% in November, marking its 10th-largest holding at $4.33B. - Buffett's shift to tech stocks reflects Alphabet's AI/cloud expansion, including Gemini 3 AI model and $100B AI infrastructure fund. - Alphabet's $34% Google Cloud growth and $2B Turkey data center partnership highlight its enterprise AI dominance ambitions. - Market optimism boosts Alphabet's $4T valuation despite regulatory risks, with BNP Paribas upgrading sh

Warren Buffett’s Berkshire Hathaway has earned a $1.4 billion gain from its latest investment in

Alphabet

Inc., as the tech company’s shares jumped 19.2% in November, bucking the downward trend seen in the broader tech sector. The conglomerate revealed

a $4.33 billion position in Alphabet

—totaling 17.85 million shares—by September 30, making it Berkshire’s tenth-largest stock holding. This decision marks a notable shift for Buffett,

who has traditionally preferred businesses with steady cash flow

rather than the unpredictability of tech stocks.

Alphabet’s recent rally is largely attributed to its rapid advancements in artificial intelligence and cloud services. The company

introduced its most sophisticated AI model

, Gemini 3, which now supports 650 million users. Google Cloud’s infrastructure initiatives,

such as a $2 billion collaboration with Turkcell

to build a new data center in Turkey and a $100 billion AI infrastructure fund co-managed with Brookfield, highlight its ambition to lead the enterprise AI sector. At the same time,

Vice President Amin Bachdat stressed

the importance of expanding computing power by 1,000 times over the next five years to satisfy AI demand.

The stock’s strong performance has caught the market’s eye as Alphabet’s valuation nears $4 trillion, fueled by impressive third-quarter earnings.

Revenue rose 16% to $102.3 billion

, with Google Cloud growing 34% compared to the previous year.

DA Davidson analysts observed

that Meta’s reported interest in acquiring Google’s Tensor Processing Units (TPUs) for its data centers could further support Alphabet’s AI hardware approach. This news has already pushed Alphabet’s stock to new highs, while

Nvidia’s shares dropped 2.7%

amid concerns about rising competition.

Buffett Embraces AI: Berkshire Gains $1.4 Billion from Alphabet Investment image 0

Berkshire’s investment reflects growing market confidence in AI-powered expansion, even as regulatory and valuation risks persist.

Alphabet’s forward P/E ratio of 26.9

is lower than competitors like Microsoft and Nvidia, which trade at 31.8, making Alphabet appear relatively undervalued. Still,

the company’s $98.5 billion cash reserves

and annual capital expenditures of $91–93 billion illustrate both the growth potential and the possible pressure on profit margins from its AI investments.

This investment comes as Berkshire prepares for a leadership change, with Vice Chairman Greg Abel set to take over as CEO in January 2026.

Experts believe

the Alphabet purchase signals a move toward high-growth industries, marking a departure from Buffett’s usual value-investing strategy. For now, the stock’s upward trend remains strong, with

BNP Paribas analysts raising

their rating to “Outperform” and setting a price target of $355.

Disclaimer: The content of this article solely reflects the author's opinion and does not represent the platform in any capacity. This article is not intended to serve as a reference for making investment decisions.

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